One of the best platforms for risk management is the MCX. The Multi Commodity Exchange of India Limited (MCX) offers traders the opportunity to trade in commodity derivatives. In India, this is the first listed exchange for commodity derivatives trading that come into being in November 2003.
Features of the CTCL
One of the technologies available for the members of the MCX is the Computer to Computer Link (CTCL). The Exchange provides a front-end Trader WorkStation (TWS). The members can expand the individual trading facility using API, which is a set of data structures. The user can develop their own software to connect with the Exchange and make transactions. However, this CTCL facility is only available for members of the Exchange.
Many of the members develop their own risk management tools using customised software. These software meets the specialised needs such as online trade analysis. Others integrate the back-office operations with the daily operations so they are always ‘online’ and have access to the records and files. The CTCL helps the members to completely control their trading operations so that they can provide their online and local clients with efficient and effective service. The software for the CTCL is available with vendors registered with the Exchange.
Thus, the members of the Exchange can develop the CTCL software but they must procure the API document from the Exchange. In this document, all the details of the procedure to use for the CTCL software is given. By following the instructions, the user can interact with Trading system of the Exchange. This will serve as a guide for development for the user. The member will manage the CTCL setup that includes setting up the network, hardware, application software, and more. You can choose from two types of APIs – FIX API and Non-FIX API.
Become a MCX member
You must take a membership in the MCX. For this, you must submit the form available online and submit the fees. The fee is Rs 7.5 lakhs for TM, Rs 25/ Rs 15 Lakhs for TCM, Rs 25 lakhs for ITCM, and Rs 10 lakhs for PCM. Then, you must await the selection process and wait until you are selected. This consists of an interview by the Membership Selection Committee. If you pass this you will be admitted as a member in the MCX.
Once this is over, you must get admission in the SEBI. Submit your application and they will process it. Once you are registered with the SEBI, they will take action to activate your trading rights. This is the last step. After this, you can begin trading.
Check the various memberships
You have various kinds of memberships such as Trading Member and Professional Clearing Member. In addition, you also have Deposit-based Trading-cum-Clearing Member, Non-deposit-based Trading-cum-Clearing Member, and Institutional Trading-cum-Clearing Member. The Trading-cum-Clearing Members can use their personal accounts to make trade. Also, they can conduct trades on their client’s accounts.
The Professional Clearing Members clears trades that took place in the Exchange involving the trading members and the trading-cum-clearing members. Any company or institution can qualify as a Professional Clearing Member provided their net worth is Rs 500 lakh. If you like to qualify, submit an application.